Getting paid not to work
Some large law firms are putting their incoming associates on hold until the economy picks up, in return for a stipend of up to $80,000.
NEW YORK (CNNMoney.com) -- As many Americans are struggling to find a job, some are getting paid as much as $80,000 a year not to work.
A number of third-year law students on the brink of graduation are being asked by their future employers to stay home for now - with pay.
Over 100 large firms, or firms with 200 or more attorneys, have delayed the start date for at least a portion of their incoming first-year associates, according to Above the Law, a blog covering the legal industry. The majority of those firms have delayed start dates into 2010, and provided some financial assistance to those on standby, Above the Law said, a move that doesn't come cheap.
Some students have been offered hefty stipends of up to $80,000, and even full benefits in some cases.
"The firms want to keep these people and don't want to lose them," explained Andy Stettner, deputy director at the National Employment Law Project.
The normally recession-resistant industry of law has not been immune to the current economic downturn. So far over 10,000 jobs in the sector have been lost this year, according to the Labor Department's most recent data.
In previous years, well-performing summer associates have been extended offers in the early fall to start the following year, once they have completed school.
But in the past several months, some of the nation's largest law firms, including White & Case, Latham & Watkins and Skadden Arps are reaching out to their soon-to-be first years, who received offers last fall, and asking them to defer their start dates for several months, or even up to a year.
Instead of rescinding offers, as some large law firms did during the recession in the early 1990s, "the law firms are anticipating starting the 2009 associates when the economy gets better," according to Kim Fields, director of career services at Wake Forest University School of Law.
For those eager to start their careers, and under the weight of hefty student loan bills, a deferment can be disappointing. The stipend may not be enough to cover the cost of living for a year in some expensive cities like New York or D.C., Fields noted.
Other students are considerably enthusiastic. Adam Rahal, 25, says he is "absolutely thrilled" about the opportunity to defer his start date until the fall of 2010. The Pace University third-year law student was offered $65,000 from Shearman & Sterling in New York to cover his expenses for the year.
"It's an awesome opportunity that they're willing to shell out that kind of money just to keep us happy," Rahal said.
"My friends in investment banking just lost their jobs. We're really lucky."
Over the course of the next year Rahal intends to volunteer at the international criminal tribunal or do environmental litigation instead of starting at Shearman & Sterling, earning $160,000 a year.
With signed contracts, deferrals are mandatory at some firms, while other deferment offers like Rahal's are voluntary. Some have a catch - that incoming associates are required to spend their deferment working at a non-profit or for one of the firm's pro bono clients. Other firms require no public interest work at all.
Overall, many agree that a paid deferment can be a win-win for students like Rahal and the firms that employ them.
"In the larger scope these students are quite lucky, they're going to be paid a perfectly decent salary and they can do what they want," said Rachel Littman, Assistant Dean for Career Development at Pace Law School in New York.